Blackstone to earn $100m in two years on Sydney office

The office tower at 1 York St in Sydney.
The office tower at 1 York St in Sydney.

Private equity group Blackstone is looking to capitalise on Sydney’s hot office market by offloading an office tower in York St it picked up from distressed Chinese company HNA at the beginning of last year.

Blackstone picked up the leasehold tower at 1 York St for $205 million and could sell it for about $300 million.

The pricing reflects the rise in market sentiment and Blackstone’s leasing activity in the property.

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Blackstone is also looking to exit its one-quarter stake in the $1.6 billion Liberty Place complex in Sydney with CBRE and JLL advising it.

That contest partly hinges on the rights held by co-owners ISPT and the GPT Wholesale Office Fund.

But the company is maintaining its faith in the city’s office market and in June bought the towers above Westfield Sydney for $1.52 billion.

After a boom period of purchases some Chinese companies have been in retreat as their debt-laden global empires come under financial and political pressure to repatriate capital to the mainland.

HNA’s sales have included hotels, properties and insurance firms worldwide.

Mystery surrounding the company’s ultimate ownership derailed a $1bn real estate investment trust seeded with assets including Australian skyscrapers that was to list in Singapore in 2017.

The York Street building, formerly Colonial House, has 25 storeys with floor area of 859sqm. The B-grade building has a net lettable area of 18,422sqm and four levels of parking for 125 cars.

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